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Adams Company has two products: A and B The annual production and sales of Product A is 500 units and of Product B is 900

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Adams Company has two products: A and B The annual production and sales of Product A is 500 units and of Product B is 900 units. The company has traditionally used direct labor-hours (DLHs) as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $67, 522. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1. Activity 2, and General Factory-with estimated overhead costs and expected activity as follows: $103.88 per DLH $13.83 per DLH $54.86 per DLH $8.91 per DLH

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